OBOSS closed the week out in extreme over sold territory. This has been a very difficult week for equity markets and we are seeing the best buying opportunities in two years. While there is a high risk of the markets continuing lower OBOSS indicates that we should be buyers for an impending bounce. If you look at price as a rubber band, the band is stretched to the breaking point in one direction and will most likely snap back to more neutral levels. There is always a chance the rubber band breaks and the markets free fall into the abyss. The way I see it – if the world isn’t ending, we have a great buying opportunity on our hands. If the world is ending, we have more important things to worry about then the price of stocks. If you’re buying, scale in slowly and build a position for the bounce. If you are following the TNA trade from last week, we started building a position in anticipation of the bounce trade.

We are in a confirmed down trend and using OBOSS to time a bounce trade. Margin should never be used to trade against the trend. Trades against the trend are higher risk then trend trades so caution is advised.

OBOSS indicates the market is entering over sold territory. SPY is trading below it’s 50 and 200 day moving averages. The trend is leaning towards lower prices while at the same time OBOSS is getting over sold. We are also hovering at a previous level of support from earlier this year at 125.00. If support holds we may have another OBOSS bounce trade on our hands. Normally we like to start entering the market as OBOSS gets into over sold territory. We’re not quite there yet, but we’re close enough to start buying a little as you see opportunity. A small move to SPY 125 would be enough to get us to -2.0 while a stronger move down to 124 is enough to push us into extreme territory. Later today I will follow up on the TNA trade that we’ve been discussing. We will be looking for a relief rally in the near future.

OBOSS closed in neutral territory again today which indicates the odds favor further declines as the trend continues. We are watching SPY to see where support will develop. It looks like a test of the 200 day moving average on SPY is possible.

Today TNA hit our target price of 75 a share where we will review OBOSS and see if it is good time to consider going long the ETF. OBOSS indicated today that TNA is currently trading at fair value so we would not want to get involved at this level thinking TNA is due to bounce. It very well may bounce from this level due to some news out of Washington, but we don’t have any indication from OBOSS that TNA is close to being over sold. The current model shows TNA in over sold territory at 65 and at extreme levels at 60 (this will change as the market changes). The reason TNA did not enter over sold territory today (with the 8 point drop) is due to the following reasons;

#1 Today’s selling came in strong enough to keep OBOSS neutral (healthy) which indicates that the current trend is intact and should continue.

#2 A lot has happened in the market since 7/18/2011 (mini rallies and dips) which impact OBOSS’s results. OBOSS indications are moving targets and need to be reviewed daily to have the best forecasting success.

Overall we use OBOSS as a tool to help us enter and exit the market at extreme readings. I like to trade with the trend which increases the odds that the trade will be successful. The best case trades come in when OBOSS is in extreme territory opposing the current trend.

Bullish example: OBOSS indicates the market is extremely over sold -2.5 and the current trend (as measured by the 50 day moving average) is heading up (best if price is trading above or at the 50 day at the time of the reading).

Bearish example: OBOSS indicates the market is extremely over bought +2.5 and the current trend is heading down.

We are likely to see OBOSS reach extreme over sold territory in the near future (there will most likely be some bounces before that happens). It might end up being a good setup for a quick swing trade on TNA (similar to mid June), but caution is advised because the market is in a down trend and the longer term up trends (200 day MA) is starting to fade. Bounces are not to be trusted until the market proves it can hold support and moving averages align to the upside again.

I hope this information helps improve your investing.

NOTE:

This is a hypothetical example of how professional traders could use this indicator and not a suggestion for anyone to invest in any ETF, stock, or speculative trade. Trading is very risky and no matter what any indicator suggests prices can decline until they reach zero!

OBOSS closed today almost exactly on the neutral line. Considering the market action this week a neutral reading might seems strange, but what this really tells us is the buying and selling are coming in at healthy levels and one side isn’t being over done. Some people might feel the market is over sold because it is down this week, but according the the propriety algorithm built into OBOSS we are neutral. Neutral readings don’t give us any edge in the market outside of expecting the current trend to continue. The trend is leaning down, but isn’t extreme so odds favor lower prices or sideways consolidation.

OBOSS closed near zero (neutral) today while SPY was down almost 1%. SPY’s 50 day moving average is heading lower so any rally should be looked at with suspicion until it proves otherwise. Having OBOSS hovering at neutral and SPY heading lower indicates that selling is orderly and not causing an over sold condition. This type of market action could go on for a long time so be careful with any long positions until we have some indication that the up trend is resuming or we get extremely over sold.

OBOSS closed the week out in neutral territory. We are watching SPY to see what trend develops. Right now SPY is range bound with a mostly flat 50 day moving average. It is a good time to research new opportunities to implement once the trend is clearer.

OBOSS closed at .06 which is neutral. SPY’s 50 day moving average is getting starting to show signs of trending downward. Caution is advised as we’re not over sold and there isn’t a confirmed trend to follow.

OBOSS closed in neutral territory again today. The markets are holding up at support and buyers are showing interest in US equities. The trend is still mostly flat so we don’t have a whole lot to go on at this level. It appears most market participants are being cautious to moderately bullish. If you’re buying at this level of support, it is prudent to scale in slowly as you see buying opportunities.

OBOSS closed in the neutral zone and the market continues to consolidate. Today’s market action showed a lot of indecision amount the participants. We are focused on SPY support levels. The 50 day moving average is at 131.75 and the next support level is at 130.00. If these levels fail, I would look for OBOSS to get extremely over sold again for the next best entry point for longs.

OBOSS closed the week at 1.27 which is more or less neutral. The market consolidated today which brought us back from the edge of being over bought in the short term. A test of the 50 day moving average would be healthy, but buyers are being very aggressive and taking advantage of any weakness. The only negative from today’s market action was a potential one day island reversal. I think this is something to keep in mind when buying weakness. Scaling in slowly and managing risk are prudent considering the extreme moves of the last month.

OBOSS closed at 1.66 which is edging into over bought territory. There is plenty of room before we get to extreme levels, but this rally has been impressive because it went straight from extremely over sold to over bought without a pause. If SPY hits 137 without pulling back or increasing volume, we will be in extremely over bought territory. The moving averages are coming around and it looks like the market is confirming the longer term up trend. Caution is advised as we are into the over bought zone – protect your profits and look to buy weakness once this move it over.

OBOSS closed at 1.28 and the market is consolidating the relief rally by holding current levels. It would be healthy for the market to pull back and test the 50 day moving averages. If we move higher without a pull back or increasing volume, SPY will enter over bought territory at 135 and extreme levels at 137 Keeping that in mind… protect profits and look for buying opportunities as the market consolidates the last rally.

OBOSS closed last week at .64 SPY is trading above the 50 day moving average and the 50MA is flat. Protecting profits from the recent rally is top priority right now. We are watching SPY to see if support will develop around the 50MA. If we do find support at the 50MA, this should be considered a buying opportunity as the up trend is most likely resuming. This is a good time to review your shopping list of good quality stocks.

OBOSS closed at -1.12 which still leaves some room to the up side before we get back to neutral. Since we are no longer in a confirmed up trend, caution is advised once the market reaches equilibrium. We will review the trend once OBOSS is neutral. I suspect SPY will be trading near it’s 50 day moving average when OBOSS reaches zero.

OBOSS closed at -1.14 which is slightly over sold. We are hovering in the same area as yesterday waiting to see if the market’s pull back to support will result in a larger rally. So far we have seen the market rally off extremely over sold levels to slightly over sold levels which means there is the potential for more up side as OBOSS works it’s way back to neutral.

OBOSS closed at -.90 which is still slightly over sold, but today’s rally did a lot towards bringing the S&P 500 back to equilibrium. We still have some room to the upside before we’re back to neutral.

SPY is trading in an area where the sellers have previously defended their positions. This is the 5th time SPY has tested the 130 zone (see below). The more times a level is tested the more likely it will break (at least that’s the theory).

What might happen… the sellers jump on SPY’s 130 level again hoping to bring the market down, but I suspect they will be overcome by buyers who have not had a chance to participate in the relief rally. Below is a chart with a potential of what might happen (look at the green line showing the market moving initially lower and then breaking out to the upside). Of course, this is all theoretical and we could just as well end up over sold again, but I think the odds favor some support this time around.

If this scenario plays out, it would be very bullish in the short term.

OBOSS closed at -2.22 and the market was ugly today. There are fundamental reasons why sellers over took buyers, but at the same time price action like today is pricing in Armageddon which is not likely. OBOSS is extremely over sold and we don’t have a lot of room before it hits the max level of -2.5. Today I pulled an old OBOSS chart out from early 2009 when the market was crashing and OBOSS wasn’t as extreme as it this week. That tells me that today’s selling is emotional. Unless the world is really coming to an end, this is most likely a buying opportunity. If you’re a buyer, scale in slowly in good quality stocks and don’t use margin.

Below you can compare today’s OBOSS readings to the readings we had in early 2009 right as the market turned around.

OBOSS closed today at -1.43 which is still slightly oversold. The market has started it’s relief rally and the buyers are taking control which will work off this over sold condition. We have a lot of upside potential providing the media (head line risk) stays at bay. Hopefully you were a buyer when OBOSS was hitting -2.49 and now have some stocks with healthy profits. Risks are still high since we’re viewing this rally as a “relief rally”. Protect profits!

Once OBOSS gets back to neutral levels (around zero) we will review the trends and see if there is any potential for the market to continue higher from that point.

OBOSS closed at -2.20 today. Today’s market action showed indecision. Buyers matched today’s sellers and that brought OBOSS back from the brink. We are looking for a rally as the buyers over take the sellers.

OBOSS closed at -2.49 which is as close to -2.5 as the market can get without actually tagging the most extreme over sold level. The market tried to rally several times during the week, but failed. Everything seems so negative that it is almost impossible to look at the market in a positive way, but with OBOSS at -2.49 we should be looking for a bounce within the very near future.

Look for good quality stocks to take advantage of the coming relief rally. The last time OBOSS was at this level was March 16, 2011 If you had purchased SPY on March 16th and sold when OBOSS hit +2.49 on May 2st (NOTE: OBOSS hit +2.49 on May 1st, so May 2nd was your first chance to sell), you would be up over 10 points! Using TNA you would have been up over 26 points!!! (NOTE: TNA is a high risk triple leveraged ETF – only suitable for the professional trader).

OBOSS closed at -2.44 which is an extreme over sold indication for the S&P 500. OBOSS has moved as low as -2.5 in the past so there is a potential for more downside, but at this time odds favor a relief rally in the very near future.

OBOSS closed at -1.3, but we dipped near over sold territory during the day with the OBOSS low being -1.5 Anything less then -2.0 we consider an over sold condition with -2.5 being an extreme level that we can be assured a bounce will following soon afterward.

SPY is getting some support at the current level, but we will have to see if it holds tomorrow. The trend is neutral and OBOSS is not extreme so at this time we are waiting for the market to confirm which way the consolation will resolve (Up or Down).

OBOSS closed yesterday at -1.11 while the market declined 2%. Since OBOSS is neutral we are taking our cues from the trend on SPY. We were watching SPY to see if it could break above the 135 resistance level to signal the end of the recent consolidation. Instead of breaking above the 135 level, SPY moved back down below the 50 day moving average and back into the recent trading range we’ve seen during the consolidation. This type of market action indicates that the consolidation is not resolved. The 50 day moving average on SPY is mostly flat (moving up a little) so we will have to wait and see which way the market resolves this consolidation before making any major commitments. Odds favor trades with the trend which is flat to slightly up.

OBOSS closed the week out at -.10 while the S&P 500 held above the 50 day moving average. OBOSS has been holding at or near neutral levels which indicates buying and selling is at an equilibrium. We are looking for the bulls to take control and push the market back to over bought levels. Once OBOSS is at over bought levels again we will be able to evaluate how strong the up trend is by seeing if SPY is at a new high. We are also watching SPY and looking for prices to break above the 135 level which will invalidate the recent consolidation and gives the bulls something to celebrate.

Odds favor trades with the longer term up trend while the S&P 500 holds above it’s 50 day.

OBOSS closed at -.30 which is still neutral and doesn’t give us a lot of indication of which way the market will run. Normally when we are getting neutral readings on OBOSS we look to SPY’s 50 day moving average for clues to the trend. SPY’s 50 MA is starting to move up again and SPY closed right above it which is considered bullish. If this level holds as support, it will indicate the longer term trends and the bulls are taking control. If this level fails, I would expect a pretty quick move to 129.50 – 130.00 to test the previous level of support.

With OBOSS neutral and SPY giving us some mixed signals caution is advised. Dips can be bought, but only with low risk good value stocks. Let’s see if support holds and then we can get more aggressive to the long side.

OBOSS closed at -.70 which is nearing over sold territory. There is still room for this consolidation to go lower with OBOSS still hovering in the neutral ranges. SPY closed below it’s 50 day moving average which is considered bearish, but not the end of the world. We will have to see how well SPY holds up as it test support levels around 130.00 The longer term up trend is at risk and OBOSS has room before getting over sold so error on the side of caution until we see evidence the market can support the 50 day moving averages or OBOSS gets extremely over sold at -2.5

OBOSS closed at .84 which is still very neutral. The market bounced off support from earlier this week. Now we need to watch the market carefully to see if this rally will follow through and bring us new highs. Odds favor trades with the trend, but caution is advised as we’re not seeing the same level of momentum we experienced the last two pushes higher.

OBOSS is still neutral while the market consolidates further. The S&P 500 (SPY) is still holding the up trend on the daily charts, but the intermediate charts are more neutral. We are watching SPY’s 132.50-133 level to act as support. If SPY breaks lower then this level on a closing basis, we should become more defensive. At the moment though, we are still in an up trend and buying the dips (scaling into good value stocks). With OBOSS neutral and SPY zoning in on a recent support level odds favor the longer term up trend will resume shortly.

OBOSS entered neutral territory with yesterday’s close of .91 There is still potential for the market to get over sold, but now that we’re in basically neutral territory (anything between +1 and -1) we should start looking for the previous up trend to resume.

OBOSS is indicating that the over bought condition in the market is being worked off with healthy selling. The selling has been orderly and doesn’t show the signs of a major correction yet. There is still room for more downside as OBOSS heads back to a neutral / balanced level. With the market in a strong up trend, the dips present buying opportunities for high quality stocks. Caution is advised as nobody can predict the future, but as they say – “the trend is your friend”. Odds favor a resumption of the trend once the over bought condition is completely neutralized. Once we have a neutral reading from OBOSS we will revisit the moving averages on the S&P 500 and verify the current trend.

On an interestingly bullish note… OBOSS started to climb while the market was declining. This type of diversion is very rare and usually indicates that there are many more buyers in the market vs. sellers.

OBOSS closed the week out at 2.49 which indicates the market is over bought. OBOSS tagged 2.5 during the day on Friday, but closed just a hair off the max level. In the past when OBOSS hit this level we saw consolidation following the signal soon afterwords.

OBOSS closed today at the semi extreme level of 2.3 This indicates that the market is getting over bought. The market is in a strong up trend and we should protect profits by following portfolio sell rules. Usually when the market gets to this level we see pull backs which provide great buying opportunities to enter new positions and add to existing positions. We still have room to the upside, but caution is advised if we see a sudden move higher tomorrow without a lot of supporting volume. The best case scenario would be consolidation at this level letting OBOSS fall back under 2.0

OBOSS closed last night (4/25/11) at 1.47 which indicates that the longer term up trend is building momentum. We will need to keep an eye on OBOSS as it gets over 2.0. Hopefully you were able to add to good positions and find value stocks to purchase when the market was down. Now our job is to protect profits as the market moves higher.

OBOSS closed at 1.59 today. This indicates that the rally is gaining strength and we are working our way towards the upper end of OBOSS’s range. We are buying the dips until we get to the 2+ area which will indicate the market is getting over bought. OBOSS could easily bounce around at this level for a few weeks before getting to an extreme level.

OBOSS closed at 1.2 today which indicates the rally is still alive. We are now entering levels that gave us trouble before. Let’s see if the bulls can take the market to a new high.
Today the S&P 500 closed above the 50 day moving average which is bullish. The longer term trend line (200 MA) is still very bullish and the 50 day MA is neutral. Caution is still advised with riskier stocks. This is a good time to review your portfolio and rebalance for high quality growth stocks. As OBOSS climbs again to higher levels sell rules should be followed to protect profits as they are generated.

OBOSS closed the day at a healthy .19 We experienced a dip / buying opportunity on Monday, but in reality it was difficult to buy because Standard & Poor’s cut its ratings outlook to negative for US credit. Hopefully you were able to benefit from the lower stock prices.

With the last few weeks being “OBOSS neutral” we need to review the trend on the S&P 500.

The long term trend for the S&P 500 is currently neutral to up. The 50 day moving average is flat and the 200 day is moving up. It is mildly bullish while the price of the S&P 500 is below the 50 MA which is considered mildly bearish. The market is dead locked in a neutral market reading which doesn’t give us any advantage until we have higher or lower prices to push this level to bullish or bearish. This is common during healthy consolidations, but could also indicate a change in trend is coming.

If the market can move higher then the 50 day tomorrow and hold that level, we will have a more bullish scenario developing. Caution is advised for new stock purchases and higher risk positions should not be taken until we see some evidence the market can reclaim the longer term up trend.

OBOSS closed the week at .54 which is a healthy level for the market. Since the trend is still up we should expect the market to push higher until OBOSS gets close to 2.0 That gives us lots of room to the upside for making gains in stocks. We are looking for dips to add to good positions and this is also a good time to buy good quality stocks you find in GeoBargins and GeoSpecials.

OBOSS closed at .17 which is a neutral reading. This doesn’t give us a good indication of what the market will do next, but the odds favor the up trend resuming. Look to buy good quality stocks as they are discounted with the anticipation that the up trend will resume shortly.

BOSS closed today at .70 .70 signals a healthy level of buying and selling in the market. We are currently buying good quality stocks found in GeoSpecials and Geobargins as they go on sale. The last buying spree in the market took OBOSS to 1.5 (not quite over bought) before settling down to more neutral levels. The most logical outcome (because we are in an up trending market) would be another push higher taking OBOSS into the over bought territory. If we get there, we will need to become more defensive. The market continues to consolidate at this level which gives us buying opportunities for the next bounce higher.

OBOSS closed today at 1.39, but it tagged 1.51 twice in the last two trading sessions. This indicates to us that OBOSS is working towards the upper end of where we like to see this indicator. If SPY tags 135 in the next two days the S&P 500 will be pushing into over bought territory. With that in mind, use extra caution with margin and make sure you’re following your portfolio sell rules. We are still in a solid up trend and should be buying dips.

OBOSS closes a great week at 1.23. The market has been marching higher and OBOSS is still signaling healthy buying and selling. In other words, we are in an up trend and OBOSS does not indicate that we are over bought yet. It is a good time to buy good quality stocks when prices dip. Review your sell rules and make sure to take some profits as your stocks hit their targets.

The quarter closes out with OBOSS at healthy levels +(.98) This has been a great quarter to be in the market and I hope everyone made the best of it. We have a neutral reading on OBOSS with a strong up trend in place. We continue to buy good quality stocks while the trend is up.

OBOSS closed today at .14 which is a healthy / neutral indication for the markets. Providing the absence of any terrible head lines we should see the market build momentum for it’s next move higher and recapture the up trend. We are in “buy the dip” mode as long as this up trend holds.

OBOSS closed the week at .33 which means the market is healthy (buying and selling pressures almost equal). Hopefully you took advantage of the over sold condition and picked up some good quality stocks during that period as we are up almost 5% from the consolidation low across the board.

.33 does not give us an edge on which way the market will trade so we need to look at the moving averages of the major indexes. I prefer to use the S&P500 as a bench mark. SPY is a good ETF to view the price action of the S&P 500. The good news is as follows…

#1 SPY is trading above it’s 50 MA

#2 SPY’s 50 MA is moving up

#3 SPY’s 5 day MA is moving up and the price of SPY just broke out above the 5 day MA

These three items indicated that the up trend has been salvaged from the last consolidation and the overall price action should head higher. In other words, the odds favor a move higher from here. Our next level of resistance on SPY is 133.70 and then again around the previous 52 week high of 134.70 If we break above that level on SPY we should look for the 133.70-134.70 to provide support as the 125 level did during this consolidation.

While we expect higher prices from here there will be dips along the way. These are considered buying opportunities as long as the market is in a confirmed up trend. The biggest risk right now is the overall negative headline or new article risk. The news has been anything but positive and the market has been able to push higher. Let’s hope it continues on the path of least resistance which is currently higher. Have a great weekend.

OBOSS closed at -.49 which is a neutral indication. Another way of looking at it is the market is balanced with buying and selling. This doesn’t give us much clue to what the next move will be so we want to look at the 50 day moving averages of the major indexes. The price of the S&P 500 is still below the 50 MA, but the good news is we are seeing the 50 day starting to move up again where it was starting to flatten out last week. This indicates that there is a good chance the market will make a push higher. Caution is advised as we’re not out of the woods yet, but things are starting to look a bit more positive overall. Hopefully you were able to buy some good quality stocks last week during the dip.

OBOSS closed today at -.46 which is a neutral signal. The market is clearly working off the over sold condition with this recent rally. At this point OBOSS isn’t giving us an indication on what will happen next. We will have to take our clues from the market price action. Our best guess is the previous strong up trend will resume once the consolidation is complete. That guess is based on… #1 OBOSS became extremely over sold in a primary up trend last week which indicated a strong bounce was eminent. #2 The market bounced off a strong support area. #3 The market fell back and tested that support area and continued higher even while the new media was pumping out negative articles. Once we cross the zero indicator on OBOSS we will revisit the moving averages and take into account what direction the 50 day MA is pointing as well as how far above or below the 50 MA the market is trading. The odds favor a move higher, but there could be some bumps along the way so use caution, protect the profits you made the last few days, and keep some buying power ready for the dips.

Tomorrow I would expect a little consolidation from this level which would give us a higher low on the S&P 500′s 30 minute chart.

OBOSS closed the week at -1.42 which is considered an over sold condition. The market is more or less neutral trending on the daily time frame while it is trending lower on the shorter time frames. This along with higher volatility gives us good reason to be cautious. The good news is we bounced from a good level of support this week and it seems like the market is trying to build momentum for a push higher. While we are oversold it is still ok to buy good quality value stocks like you find in Geobargins and Geospecials with the theory that the market will continue higher to reset this over sold condition. The market should return to a balance (OBOSS near zero) at which time we will review the trends to see if raising more cash is the best option. Right now it looks like we are leaning towards a bearish trend, but that could change next week.

OBOSS recovered a bit from the extreme over sold condition we saw last night. We are still over sold and the market is more or less neutral trending. This doesn’t give us much of an edge, but I expect the over sold condition to get cleared before the next major move up or down. With the market being over sold and the trend being neutral the best thing to do is make sure you have the best quality stocks in your portfolio you can buy. If you see something of value that is deeply discounted, it makes sense to add to that position while we ride the bounce.

BOSS closed at -2.3 which is a signal the market is severely over sold. OBOSS is signaling that a bounce is very likely tomorrow or in the very near future. We have not gone from an over bought condition to an extremely over sold condition this quick since the financial crisis in 2008. This signal comes at a time when the up trend is questionable. The 10 and 20 day moving averages on the S&P 500 are moving down and now the 50 day looks like it might start declining soon. The price of the S&P500 is below it’s 50 day moving average as well.

This is a good time to review your portfolio for any stocks that are not high quality and re balance by selling the risky positions and using that buying power to scale into higher quality stocks. In other words… if you’re holding lotto plays, sell them now and use the cash to buy something of value asap. After we get the bounce higher it will be a good time to review the market overall. If the S&P 500′s 50 day moving average is moving down after the bounce, you might consider increasing the amount of cash in the portfolio. If you are on margin, it is time to close it out.

OBOSS is starting to get back to healthier levels which might indicate that the consolidation is slowing down. There is still plenty of room for the market to consolidate further, but considering the strength of the recent rally I feel a major correction is less likely then a small consolidation. At some point one of these consolidations will turn into a major market correction. The trend is still up and we should be buying good quality stocks on the pull backs until the trend has changed. Let’s keep any eye on the S&P 500 for clues when the rally will resume.